So, you’re a homeowner now… Congratulations! We always talk about the advantages of being a homeowner, but no one warns against the dangers of scams targeting homeowners… Until now! Here’s a list of 5 scams that we’ve recently encountered as new homeowners:
Before you close – watch out for wire fraud.
This has become common enough that the California Association of Realtors published an advisory. Scammers will hack into your email account (or your Realtor/escrow officer’s email account) and then they wait. They watch your email until it’s about time to close escrow. Then they send an email that looks like it’s coming from your escrow officer with new wire instructions. So when you’re ready to wire your funds to close, it goes directly to the hacker’s bank account. Wire instructions rarely change, so if you receive new wire instructions, call your escrow officer and your Realtor immediately! Also, it’s always safer to bring a cashier’s check to your signing appointment instead of wiring the money.
Third party deed service
We got an official-looking letter in the mail that said we needed to send a check for $87 to some PO Box in Corona, CA and they would send us a copy of our grant deed. We knew it was a scam because 1) we received a copy of our grant deed in the mail the day before, 2) the county recorder’s office is located within the county… not Corona, CA, and 3) our parcel number was displayed in scientific notation (not normal!). If you need a copy of your title documents you can always contact your Realtor or title company and they should be able to get those to you either free of charge or for way, way less than $87.
Life insurance for your mortgage
We also got a few letters in the mail asking if we want to purchase life insurance for our mortgage. This isn’t really a scam since there might be a small percentage of the population that would find this useful, but it just seems unnecessary for the majority of homeowners.
Alarm vendors that claim to be ADT
Again, this isn’t really a scam but there are so many different alarm vendors out there that sell ADT alarm systems, but the company isn’t actually ADT. PS when you change your address with USPS, you can get a bunch of coupons, one of which is for ADT! Other useful ones are Lowe’s, Home Depot, Xfinity, AT&T, Crate & Barrel, and Wayfair.com. No scam here, other than the fact that they want you to spend money at their store (with 10% off!).
Contractors and PACE loans
If you are going to make updates to your new home and service those big ticket items (HVAC, appliances, etc.), make sure you have a reputable and trustworthy contractor give you an estimate. You should be well-aware of all of the major items needing fixing from your home inspection. So, if something expensive comes up that you weren’t expecting, CALL YOUR REALTOR. Your Realtor can contact the home warranty company and see if that item is covered by the home warranty. Or at the very least he/she can send out their trusted contractor for a second opinion.
Your contractor may also try to sell you a PACE loan, which is a type of loan for energy upgrades that can be charged to your tax bill instead of paying cash upfront. Read our previous blog on PACE loans to see why we hate them. Long story short, some PACE loans put a lien on your home, making it very hard to sell when it comes time to move!